Preparing for New Zealand's energy revolution

Friday, 18 May 2018

OPINION: New Zealand can lead the world in revolutionising its energy systems. Getting there will require very careful planning, courage and a commitment to innovation.

Generally, trying to predict the future will have one outcome: you will be wrong. But, if you look hard enough at a range of emerging technologies and trends, you can start to build a picture of how the future is likely to look.

This is what Transpower is doing. 

Historically, planning was pretty straightforward for us – we could determine where and when we needed to invest in the national grid based on standard maintenance schedules, as well as economic and projected regional population growth. 

Those days are over.

New Zealand is on the cusp of an energy revolution, which will require a fundamental change to the way we plan for Aotearoa New Zealand's future energy needs. We won't have time to sit back and watch the rest of the world before we make our energy decisions: New Zealand will need to take co-ordinated actions to drive fundamental changes to the way we power our economy. This is the principal finding of a major piece of new research conducted by Transpower.

Te Mauri Hiko – Energy Futures was developed over the last nine months by a team of Transpower scenario planners, as well as external contributors, including Dr Rick Boven at Stakeholder Strategies, academics, engineers, and a wide range of energy sector experts. The resulting report follows a detailed examination of multiple scenarios and reviews rapidly evolving energy technologies from across the world, including how they could work in New Zealand.

While the detail will almost certainly not be 100 per cent correct, what can be relied on is that New Zealand's energy future is going to be very different to today's. Our energy future will provide New Zealand with its biggest international advantage: clean, sustainable, affordable and efficient energy to power our economy. 

Just because we're getting clearer on the future, doesn't mean realising it will be easy. Realising the full potential of our sustainable energy future will be a challenge due to the unique characteristics of New Zealand's electricity system. 

Approximately 80 per cent of our electricity comes from renewable sources, and most of that from weather-dependent hydro and wind. While other countries such as Norway also use a lot of hydro generation, Norway is close enough to Europe to connect to other electricity systems. By contrast, New Zealand has no grid connection to any other country's energy supplies for use during tight times. 

So how will we deliver a secure, sustainable energy supply over the next 30 years? The Te Mauri Hiko project landed on a scenario deemed most likely for New Zealand. Under this base scenario, the first answer is that we'll need to electrify more and more of our economy to meet New Zealand's Paris Agreement commitments. 

It's an ambitious target, but an achievable one. 

Our Te Mauri Hiko research suggests use of gas and coal for electricity generation and industrial heat processes will be replaced with renewable solar, wind, hydro and geothermal energy. Transport fleets will have converted around 85 per cent of their vehicles to electricity to realise lower operating and maintenance costs. Private vehicles will follow a similar trend as electric vehicles (EVs) become cheaper to buy, run and maintain than their internal combustion equivalents. 

By 2050, the electrification of transport and key industrial processes will double the amount of electricity generation required in New Zealand.

How can our country meet that demand? And what happens if hydro lake levels are low due to drought, which may become more common as our climate changes?

New large-scale renewable-power stations will be needed in addition to domestic energy generation, such as household solar PV. A network of batteries connected into local lines companies will help to manage peaks in daily demand.

Delivering Aotearoa New Zealand's sustainable energy future will require significant investment and must be supported by policy and regulatory settings. We must ensure we have a robust and resilient energy transmission and distribution systems, as well as a clear understanding across the industry and government of the opportunities and challenges we face.

Te Mauri Hiko is an effort to paint a picture of how our collective energy future is likely to look. It's designed to generate conversation, debate and, above all, to drive action.

 Alison Andrew is Transpower chief executive.